Beleaguered airline Flybe could be rescued with a government bailout deal to save thousands of jobs.

The business and transport secretaries are said to be preparing to hold talks with Chancellor Sajid Javid tomorrow on a proposed £100 million rescue package to save the company's UK jobs, according to Sky News.

Survival talks are underway for the airline, which handles over half of Britain’s domestic flights outside of London.

It has been trying to secure additional financing amid mounting losses, the broadcaster reported.

More than 2,000 UK jobs are said to be at risk if the airline collapses.

EY, the accountancy firm, has reportedly been put on standby to handle a potential administration of Flybe Group.

If Flybe is unable to find a rescue deal, it would be the second major airline collapse in four months

If Flybe is unable to land a rescue deal, it would be the second major airline fold in four months.

It would follow Thomas Cook Group’s collapse last September.

Flybe operates about 75 aircraft and serves more than 80 airports across the UK and Europe.

Flybe flies 8.5 million passengers each year to 170 European destinations.

It operates at UK airports including Belfast, Birmingham, Manchester and Southampton.

The Exeter-based firm currently operates a number of domestic routes too between cities which are connected by direct trains.

They include Manchester-Glasgow, Birmingham-Edinburgh, Exeter-Manchester and Exeter-London City.

Last night Flybe told the Mirror: "Flybe continues to focus on providing great service and connectivity for our customers, to ensure that they can continue to travel as planned.

"We don’t comment on rumour or speculation."

According to Sky, MPs Andrea Leadsom and Grant Shapps will meet Mr Javid to discuss a bailout proposal.

It could reportedly contain conditions including that the company shareholders inject millions of pounds equity into the company.

The proposals could see Flybe allowed to defer a key tax worth an estimated £106m, for three more years.

Flybe could hold onto the air passenger duty bill and use it as capital to kickstart a turnaround plan, according to Sky.

The company was last year bought by a Virgin Atlantic-led consortium called Connect Airways, which paid £2.2m for Flybe's assets and operations.

A Government spokesperson said earlier: “We do no comment on speculation or the financial affairs of private companies.”